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EPA Amends Rule for All Appropriate Inquiries StandardAugust 22, 2013

EPA amended the "All Appropriate Inquiry" rule on August 15, 2013 to confirm that complying with the new ASTM E1527-13, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for due diligence prior to purchasing property will meet the standard to establish innocent landowner liability protection under CERCLA. ASTM E1527-13 updates the 2005 standard to meet the "All Appropriate Inquiry" by a prospective purchaser of a potentially contaminated property for future liability protection.

Related Practice: Environmental & Land Use

Attorney: Frances Stella

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New Jersey Appellate Division Finds Liability For Owner Who Fails to Conduct Due Diligence Pre-1993November 13, 2012

The Appellate Division adds uncertainty to property owners for Spill Act liability in New Jersey State School Development Authority v. Marcantuone et al. This decision has opened the door for the court to set the due diligence standards for liability for pre-1993 property purchases, rather than the Legislature.

The plaintiff sued the former owners of a property, which was condemned by the State, seeking contribution for costs associated with the remediation pursuant to the Spill Act. The Trial Court dismissed the case on defendants' summary judgment motion, based upon the uncontested fact that no contamination occurred during the defendants' ownership and that they had purchased the property prior to 1993.

Plaintiff appealed arguing that the 2001 Amendments to the Spill Act and the defense of all appropriate inquiries presupposes the existence of liability for owners of contaminated property who fail to conduct environmental due diligence. The defendants countered that the legislature did not expressly provide that all persons who acquired title prior to 1993 were in any way responsible for pre-acquisition discharges and if the legislature had wanted to expand the liable parties for property contamination it would have specifically done so. The trial court relied on the White Oak decision to interpret "in any way responsible." On appeal, the plaintiffs argued that the White Oak decision was superseded by the 2001 Amendments to the Spill Act, which were adopted prior to the release of the White Oak decision and became effective one week after the decision. The Appellate Division was persuaded by the plaintiff's argument.

The Appellate Division reversed the trial court's dismissal finding that the defendants can be found "in any way responsible" for the hazardous substances on the property by virtue of their lack of due diligence in discovering the contamination when they purchased the land.

The Appellate Division directed that, on remand, the trial court must first determine what the generally accepted good and customary standards were at the time the defendants acquired title to the property. The defendants then can present evidence as to what pre-purchase efforts and investigation they undertook. The Court concluded that "liability will depend upon whether defendants satisfied the prevailing standard as found by the court."

Related Practice: Environmental & Land Use

Attorney: Frances Stella

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